PITTSBURGH (AP) -- A western Pennsylvania woman pleaded guilty to fraud Tuesday in what federal prosecutors say was a $2 million scheme to sell phony magazine subscriptions door-to-door using sob stories claiming the sales benefited the military, children's hospitals, single mothers or ex-cons looking to turn over a new leaf.
Lahron Buchanan, 32, of Pittsburgh, must return to U.S. District Court Dec. 3 when she faces up to 20 years in prison.
Assistant U.S. Attorney Nelson Cohen told the judge that Buchanan is responsible for up to $400,000 of more than $2 million stolen from thousands of customers in western Pennsylvania, Washington, Texas and Arizona between February 2007 and February 2011.
U.S. Postal Inspectors contend the scam was the brainchild of Samuel Cole, a Pittsburgh man and father of Buchanan's child, who began business as New Image Consultants Inc. then changed names and locations to remain a step ahead of law enforcement, also operating as Fresh Start Opportunities in Seattle in 2008 and Destiny Sales Inc. of Dallas and West Memphis, Ark., beginning in 2009.
Cohen told the judge Cole, 44, recruited "crews" of workers who were sometimes housed in local motels and given unspecified compensation to sell the magazines, ultimately swindling more than 21,000 customers. Buchanan started out selling the magazines, and later kept track of the companies' paperwork as part of the scheme, Cohen said.
"She's not responsible for the entire scheme and she's not the primary person in the scheme," Cohen told Senior U.S. District Judge Maurice Cohill Jr.
Buchanan has cooperated with investigators and told them she issued a handful of refunds to wary or unhappy customers, just to keep the scheme from unraveling. But Cohen said investigators found only one instance in which a refund was paid — and none in which customers actually received magazines.
"We couldn't find any money that was ever paid to a legitimate magazine company," Cohen told the judge.
Instead, the money — minus whatever overhead was spent to pay or house the "crews" — apparently went to Cole, investigators determined.
Workers were instructed to pose as single mothers who needed the money, ex-cons trying to get back on their feet, or to tell customers that the money or magazines were benefiting some other good cause.
"They generally indicated some sort of a heart-rending pitch," Cohen told the judge, telling customers the magazines would be sent "to help the troops" or be delivered "in the name of a local children's hospital."
Court records indicate Cole is continuing to contest the charges, though no trial date has been set. Cole's federal public defender did not immediately return a call and email requesting comment.
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